- AfCFTA can lead to paradigm shift
African Export-Import Bank (Afreximbank) struck financing deals worth more than $1 billion with several leading business entities and governments across the continent.
The third day of the third Intra-African Trade Fair (IATF2023) in Cairo, Egypt concluded with attendees witnessing the signing of financing and other agreements between Afreximbank and several leading entities across the continent including United Bank for Africa (UBA) and Anambra State.
IATF2023, Africa’s largest trade and investment fair, opened on November 9 and will run till November 15, 2023.
Also, yesterday, Deputy Chairperson of IATF2023 Advisory Council and former President of Afreximbank, Jean-Louis Ekra said the African Continental Free Trade Area (AfCFTA) can break Africa’s colonial legacy of exporting raw materials and importing finished goods.
Afreximbank signed a $150-million trade finance facility agreement with UBA under the Ukraine Crisis Adjustment Trade Financing Programme for Africa.
The fund would be utilised to finance trade and trade-related transactions in support of UBA clients to facilitate increased financing of trade businesses in various sectors of the Nigerian economy to mitigate the adverse effects of the Russia-Ukraine crisis.
The deal signed by Denys Denya, Executive Vice President, Finance, Administration and Banking Services, Afreximbank, and Oliver Alawuba, Managing Director of UBA, is expected to enhance confidence in the settlement of international trade transactions for strategic imports.
Afreximbank had also signed a mandate letter to provide capital raise financial advisory services to the Anambra State Government of Nigeria for an estimated $200-million facility to support the development of three major projects in the state.
The projects included Ikenga Mixed-Use Industrial City Project, Anambra Export Emporium and Akwaihedi Unubi Uga Automotive Industrial Park.
The bank also signed an agreement to provide the state government with financial advisory services for the development of operational and governance framework for the Anambra Diaspora Fund, including capital raise financial advisory services for the Anambra Intra-City Rail Master Plan project and the Anambra Diaspora Fund.
Kanayo Awani, Executive Vice President, Intra-African Trade Bank, signed for Afreximbank while Mark Okoye, Chief Executive Officer, Anambra State Investment Promotion and Protection Agency, signed for the state government.
Another facility agreement, for $10 million, was signed with FDH Bank Malawi to support trade finance in Malawi. Gwen Mwaba, Director, Trade Finance, signed for Afreximbank while George Chitera, Deputy Managing Director, signed for FDH Bank Malawi.
Also, under a facility agreement with Banque Commerciale du Burundi (BANCOBU), Afreximbank will provide $55-million trade facilitation limits to BANCOBU to support importation of essential commodities, such as petroleum products, which are important for the Burundi’s trade and manufacturing sector.
Rene Awambeng, Global Head, Client Relations, signed for Afreximbank while Sylvere Bankimbaga, Deputy Managing Director, signed on behalf of BANCOBU during a ceremony witnessed by Audace Niyonzima, Minister of Finance, Budget and Economic Planning, of Burundi.
Afreximbank also signed an agreement under which it will provide a $40-million AFTRAF facility to Banque de Credit de Bujumbura (BCB) to support trade finance in Burundi. Signers were Rene Awambeng, Global Head, Client Relations, for Afreximbank and Roger Guy Ghislain Ntwungeye, Managing Director, for BCB.
Also, a term Sheet for a $141-million intra-African investment finance facility was signed with Exodus and Company. Denys Denya, Executive Vice President, Finance, Administration and Banking Services, signed for Afreximbank while Progress Mambo, Chief Executive Officer, signed for Exodus and Company.
Another term sheet for an Euro 140-million intra-African trade investment facility was signed with Ora SPV/Vista Group for funds to be deployed in Burkina Faso. Kanayo Awani, Executive Vice President, Intra-African Trade Bank, signed for Afreximbank while Simon Tiemtore, Chairman of Lilium Capital, signed for Ora SPV/Vista Group.
The bank also signed a term sheet with ADI SPV/Vista Bank for a Euro 113-million facility to be deployed in Burkina Faso. The term sheet was signed by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, for Afreximbank, and Simon Tiemtore, Chairman of Lilium Capital, for ADI SPV/Vista Bank.
Another term sheet was with Lilium Gold for a $75-million senior debt facility for a strategic investment that will significantly enhance Burkina Faso’s mining infrastructure through the acquisition of the Boungou and Wahgnion gold mines. Helen Brume, Director, Project and Asset Based Finance, signed for Afreximbank while Simon Tiemtore, Chairman of Lilium Capital, signed for Lilium Gold.
The bank also signed a term sheet with Sapro Mayoko for a $96-million iron ore mine development facility in Congo. The document was signed by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, for Afreximbank and Paul Obambi, Chief Executive Officer, for Sapro Mayoko.
Afreximbank also signed an agreement with Central Africa Building Society (CABS), Zimbabwe’s largest building society, to provide a $40 million line of credit to help build capacity among hundreds of small and medium enterprises (SMEs).
Signed by Denys Denya, Executive Vice President, Finance, Administration and Banking Services, Afreximbank, and Mehluli Mpofu, Managing Director of CABS, the agreement is for three years and is aimed at fostering the growth of the SME sector by supporting productive sectors, such as agriculture, manufacturing and mining.
The bank signed a heads of terms agreement with Arise IIP for the implementation of African Quality Assurance Centres (AQAC) projects in Benin and Gabon.
Under the heads of terms, Afreximbank will develop AQACs to offer conformity assessment services such as testing, inspection and certification services in Benin, Gabon and, possibly, other African countries in collaboration with Arise IIP within industrial parks developed by Arise to support park tenants and other industries outside to enable them meet local and export market requirements.
The AQAC initiative was created by Afreximbank to support African countries to improve their capacity in complying with international standards and technical regulations so as to promote exports and facilitate intra- and extra-African trade while ensuring the safety of products for consumption in Africa.
Gagan Gupta, Founder and CEO of Arise IIP, signed for the company while Oluranti Doherty, Director of Export Development, signed for Afreximbank.
The bank also announced the conclusion of cooperation agreements with the Comoros National Investment Promotion Agency (ANPI – Invest in Comoros), the Kenya Private Sector Alliance (KEPSA) and the Kenya Association of Manufacturers (KAM), aimed at accelerating intra-African trade and investment.
The agreements seek to deepen collaboration with the institutions through sharing of ideas, exchange of business-oriented information to facilitate trade and investment, business matchmaking, grants, training, technical assistance and capacity building, inter-institutional cooperation and other agreed activities.
They are intended to increase the impact of Afreximbank’s TRADAR Club, a member-driven network set up to empower international businesses and executives to transform trade and investments in Africa through trusted trade intelligence and advisory services.
Also, a memorandum of understanding was reached with the International Centre for Regional Integration and Trade Research (ICRITR). It was igned by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, for Afreximbank and Prof. Charles Okechukwu Esimone, Vice Chancellor, Nnamdi Azikiwe University, Awka, Nigeria, for ICRITR.
Meanwhile, Ekra, who was delivering an opening statement as the Trade and Investment Conference of IATF2023 began yesterday in Cairo, pointed out the unsustainability of African economies relying on natural resources and commodities, saying that this dependence made them vulnerable to adverse trade shocks, liquidity constraints and macroeconomic management challenges.
Arguing that the situation needed to be addressed urgently, especially as it had worsened the effects of the COVID-19 pandemic, geopolitical tensions and climate change, he said that “AfCFTA cannot fail, especially given that intra-African trade is estimated at 16 per cent” which was a level of trade that compared unfavourably with other regions.
Ekra said that the low level of intra-African trade was explained by constraints such as limited trade and infrastructure including payments and settlement systems, lack of access to relevant market information, limited knowledge about business, sustained investment opportunities and limited platforms to connect buyers and sellers.
He urged African countries to recognise that the AfCFTA was the missing link the continent needed and that it presented many trade and investment opportunities in manufacturing, export development, SME promotion and trade in services.
Also speaking, Ali Basha, Minister Plenipotentiary from Egypt, welcomed guests to the conference and said that the panels hosted as part of the conference should not be missed. He urged all African nations to “work hand-in-hand to address the challenges of trade integration.”
The ceremony showcased a hologram of Kwame Nkrumah, a former President of Ghana and a major advocate for African unity.
In subsequent panels’ discussions, attendees heard contributions on a wide range of topics, including energy transition and industrialisation in Africa, transforming the manufacturing sector and promoting diversification of African trade.
During a panel on energy transition and industrialisation in Africa, Dr. Ainojie Irune, Chief Operating Officer of Oando Energy Resources, emphasised the need for African leaders to be more impatient about developing the continent, arguing that energy was crucial to Africa’s development and the transition should benefit Africa where 40 per cent of the population live without electricity.
Ms. Helen Brume, Afreximbank’s Director of Projects and Asset Based Finance, said that any discussion about transitioning to cleaner energy sources must consider that 600 million Africans still lacked access to electricity while 900 million do not have access to clean energy sources for cooking.
During a panel on transforming Africa’s manufacturing sector, Olukayode Pitan, former Managing Director of Bank of Industry, Gagan Gupta, Founder and CEO of ARISE Integrated Industrial Platform, Manuel Mota, Deputy CEO of Mota-Engil, and Brian Deaver, CEO of the African Medical Center of Excellence, deliberated on the importance of establishing connectivity in Africa’s supply chains. They agreed that such a transformation would significantly improve the lives of Africa’s 1.5 billion inhabitants.
According to them, with the key to a thriving manufacturing sector being dependent on African talent, investing in their education and training was crucial.
A highlight of the day was the launch of the impact evaluation report of the $19-billion Dangote Refinery and Petrochemical Complex in Nigeria by Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank.
Emeka Uzoigwe, Acting Director of Strategy and Innovation at Afreximbank, who noted that the complex was launched in 2018, emphasised the importance of the project’s insights for other African businesses as it had the potential to transform not only Nigeria but the entire West Africa.
The Trade and Investment Conference is a component of IATF2023. It aims to optimise access to Africa’s connected markets through the AfCFTA. The trade fair is expected to attract over 1,600 exhibitors and 35,000 visitors, with trade and investment deals worth US$43 billion projected to be concluded during the event.
